875MM Consumers Have Shopped Online – Up 40% in Two Years

More than 85% of the world’s online population has used the internet to make a purchase – increasing the market for online shopping by 40% in the past two years – according to the latest Nielsen Global Online Survey on internet shopping habits.

Globally, more than half of internet users have made at least one purchase online in the past month, according to Nielsen.

“When The Nielsen Company conducted its first global survey into internet shopping trends two years ago, approximately 10% of the world’s population (627 million) had shopped online,” said Bruce Paul, VP, Customized Research, Nielsen US. “Within two years, this number has increased by approximately 40% (to 875 million).”

Among the findings issued by Nielsen:

Among internet users, the highest percentage shopping online is in South Korea, where 99% of those with internet access have used it to shop, followed by the UK (97%), Germany (97%), Japan (97%); the US is eighth, at 94%.

In South Korea, 79% of these internet users have shopped in the past month, followed by the UK (76%) and Switzerland (67%); the US is at 57%.

Globally, the most popular and purchased items over the internet are books (41% purchased in the previous three months), clothing/accessories/shoes (36%), videos/DVDs/games (24%), airline tickets (24%) and electronic equipment (23%).

Among Germany’s internet users, 55% said they bought books, 42% had bought clothes/accessories/shoes and one in four had purchased music/videos/DVD’s in the previous three months.

During the same period, among internet users in the UK, 45% bought books online, followed by videos/DVDs/games (44%), clothing/accessories/shoes (38%), music (37%) and one in four internet shoppers also purchased and airline tickets/reservations online.

Among US internet users, in the previous month 41% had bought clothing/shoes/accessories, 38% bought books and one in three internet shoppers bought videos/DVDs/games.

The number of internet consumers buying books over the internet has increased 7% in the past two years, but the biggest increase has been in clothing/accessories/shoes, which increased from 20% to 36%.

“Some of the biggest buyers of books on the internet are from developing countries – China, Brazil, Vietnam and Egypt – indicating massive growth potential for online retailers that can specifically target these fast-growing markets,” said Jonathan Carson, President, International, Nielsen Online.

Internet shopper interest in buying videos/DVDs and airline tickets/reservations over the internet rose two and three percentage points, respectively, in the past two years; today, one in four online shoppers globally said they had purchased these on the internet in the previous three months.

More than 70% of Indians and more than 60% of Irish and UAE internet users said they bought airline tickets/reservations on the internet in the last three months, making travel the fourth most popular shopping category on the web.

“Travel is a category extremely suited to the internet due to the latter’s ability to provide efficient access to an extremely wide range of comparable information. Whilst certain areas of the travel industry were initially slow to utilize the benefits of the internet, it is now one of the undoubted success stories of online, playing an integral part in the arrangements and experience of today’s traveler,” said Carson.

One in four global internet users bought DVDs/videos online in the previous three months, with UK users topping the list (44%), followed by South Africans (38%). The US was fifth at 31%.

Selecting Online Shopping Sites

According to Nielsen, online shoppers tend to stick to the shopping sites they are familiar with, with 60% saying they buy mostly from the same site.

“This shows the importance of capturing the tens of millions of new online shoppers as they make their first purchases on the internet. If shopping sites can capture them early, and create a positive shopping experience, they will likely capture their loyalty and their money,” said Paul.

In selecting sites on which to shop, one-third used a search engine or just surfed around to find the best online store. One in four relied on personal recommendations.

“Recommendations from fellow consumers – whether they are people they know or fellow online shoppers – play an enormous role in the decision-making process. The explosion in Consumer Generated Media over the last year means that this reliance on word of mouth, over other forms of referral, looks set to increase,” said Carson.

Payment Methods for Online Shopping

Credit cards are by far the most common method of payment for online purchases:

60% of global online consumers used their credit card for a recent online purchase.

One in four online consumers chose PayPal.

Of those paying with a credit card, more than half (53%) used Visa.

Turkish online shoppers (who represent the economic elite in that country) topped global rankings for credit card usage (91%) for online purchases, followed by 86% of Irish online shoppers and 84% of Indian and UAE online shoppers.

“Shopping on the internet with the ease of a credit card is especially appealing to consumers in emerging markets who simply cannot find or buy items they want in their retail trade. The internet has opened up a whole new world of shopping for these consumers,” said Paul.

While online shoppers in Laint America and Asia are also more likely to use credit cards than any other form of payment, debit cards are most popular among UK (59%) and US (40%) online shoppers.

About the study: The Nielsen Global Online Survey is the largest half-yearly survey of its kind, aimed at gauging current confidence levels, spending habits/intentions and current major concerns of consumers across the globe. The latest survey, conducted from October to November 2007, polled 26,312 internet users in 48 markets from Europe, Asia Pacific, North America and the Middle East. The survey is representative of all internet users aged 15+.